I Want to Know if Debt Settlement, Debt Consolidation, or Credit Counseling Work

“Dear Steve,

I owe $52,000 in credit card debt. I want to know if Debt Settlement, Debt Consolidation, Debt Counseling etc….Do any of them work?

I do not want to file for bankruptcy. I have not missed any payments but mostly minimum payments.

In the mail I get all kinds offers for Debt this and Debt that. It has been very stressful. According to these so called offers, it is going to take about 27 years to pay all my debt off.

I have also heard somewhere, that I can go talk to these banks myself to see if I can get a lower interest rate. Back to these offers, they claim to get me out of debt in 3-5 years. In your best opinion, are these people a scam?

I want to know if Debt Settlement, Counseling or Debt Consolidation are true or not?

In debt $52,000. Hope to hear from you. May the God of this universe Bless you and your family. thank you.


Dear Heron,

There is no way out without some pain. The key to dealing with the debt is to match the right solution to the specific situation.

It would be a mistake however to exclude bankruptcy as an option until you knew more about it. It happens to be the only debt relief solution that is protected under the law. It is a Constitutional way to get a fresh start and second chance.

You ask if any of those solutions work and the answer is not clear. Many people are sold the wrong solution because they don’t realize that the debt relief person they are talking with is a salesperson and not a financial advisor.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

See also  Is There Hope For People Like Me With My Debt?

Then use the free How to Get Out of Debt Calculator to review your options.

Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Do you have a question you'd like to ask me for free? Go ahead and click here.
Damon Day - Pro Debt Coach

Follow Me
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
Steve Rhode
Follow Me

2 thoughts on “I Want to Know if Debt Settlement, Debt Consolidation, or Credit Counseling Work”

  1. Heron – Do you have dependable income? In other words, does your monthly pay fluctuate, or is it fixed?

    A credit counseling plan would require you to make a fixed monthly payment of between 1.7% and 2.5% of your credit card balances enrolled in the plan. If we assume all of your cards are enrolled, and a 2.1% payment, can you afford to pay $1092.00 each month? What are your payments to all of your credit cards now?

    The 1092.00 would be what you pay to a credit counseling agency on the same day each month. Missing a payment means risk that you lose the interest rate and lower monthly payment benefit, which is why I asked if you have dependable and consistent income.

    Depending on who each of your creditors are, and the amounts you owe on each account, debt settlement may look like this:

    You need 20k to settle the 52 thousand dollars of credit card balances. If you can come up with a plan to save up and tap resources to accumulate the 20k inside of 6 months, settling the credit cards will be a simple and straightforward process. If you need 12 months to settle the debts, the process could get a little bumpy. Anything longer than 12 months to come up with the money you need to settle often leads to more bumps, like increased risk of be sued etc.

    Debt consolidation, at least the most traditional definition of taking out a lower interest loan and paying off all of your higher interest credit card debt, is probably off the table. With 52k in revolving credit card debt, many will find their debt to income level is stressed to the point where qualifying for a debt consolidation loan is not possible. You may have other assets that open up the debt consolidation option more. Here is a piece about consolidating credit card debt creatively:


    If you would like, post the name of your creditors and the balances on each account. I can paint a better picture of what your options look like and post a cost and time analysis in reply.

  2. Heron, I can tell you from personal experience that Debt Management (Credit Counseling) can work. I am currently about 3.5 years into a Debt Management Program paying off $109K of credit card debt. Currently, I’ve paid off about $80K of that debt, and with 14 months left, am beginning to see the light at the end of the tunnel.

    I do agree with Steve – there is no “one sized fits all” debt relief option, and your best shot at success in getting your finances back on track is to educate yourself on ALL your options, and then making an informed decision as to which one is the best for your situation.


Leave a Comment